Jim Zellmer's View from Madison

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US senators push for Fannie and Freddie wind-down

US senators Bob Corker and Mark Warner on Wednesday made another push for their legislation to wind down Fannie Mae and Freddie Mac, saying the opportunity to resolve the ownership of the mortgage finance agencies bailed out during the financial crisis should not be squandered.

Their statements at a Financial Services Roundtable discussion on housing finance reform come as the Senate gears up to present a revised plan on Fannie and Freddie, which is aimed at pleasing both Republicans and Democrats.

The Senate banking committee’s leading Democrat and Republican, Tim Johnson and Mike Crapo, are in the advanced stages of putting together a compromise bill that borrows some aspects of the Corker-Warner legislation.

The debate over what to do with Fannie and Freddie had a new twist after Bruce Berkowitz’s Fairholme Funds in November proposed taking over operations of the bulk of the mortgage finance companies.

Mr Corker, a Republican, on Wednesday reiterated that the Fairholme plan proved there was an appetite for risk from the private sector, an issue that drew scepticism from critics of the Corker-Warner bill. White House officials have rejected the hedge fund proposal.